...Why ... do private donors — some of them entrepreneurs who should know better — engage in mindless donations of their money? After all, one who gives money to a university must (or should) have done so with a serious thought about the difference that money would make at the chosen institution. In this sense, "return on investment" refers to a concrete, positive change.

Yet in the past 10 years, donors have parted with vast sums of money in donations to colleges and universities that truly do not need them. When a university is richer than several countries put together, when a university can comfortably live off the returns on its billions of dollars in endowment, and when a university can no longer convincingly demonstrate how new money will make a concrete difference in the academic experience of faculty members and students, additional donations to the university are not only mindless but outright wasteful.

...Endowments of several millions of dollars are becoming increasingly insignificant to universities; the desire now is to become members of the billion-dollar club. Even among them, the race is on for a two-digit billion-dollar membership. One wonders if campaigns of that size are merely to accumulate wealth and bragging rights.

...[T]he increasing concentration of donations to the Ivy Leagues and top fund raisers should concern us. The 10 wealthiest institutions in the Council for Aid to Education's survey accounted for half of the total growth in private donations during the 2006 fiscal year — meaning that about $1.2-billion of last year's $2.4-billion increase in private donations went to last year's top 10 fund raisers. In a nation with more than 4,000 colleges and universities, that statistic is disturbing.

Naturally, most of those donors gave to their alma maters. But when your alma mater is already fabulously wealthy, it is advisable, indeed wise, to shun your sentimental attachment to the institution and adopt other institutions that can yield better returns. Making a concrete difference in the lives of students and faculty members should be the basis for giving to higher education.

Donations to mega-rich universities do not directly improve the academic experience of their professors and students, or result in any qualitative improvement in student learning. However, there are institutions where noticeable changes can be brought about by small donations — where classrooms can be upgraded, libraries renovated and expanded, and the burden of cost on students alleviated. These institutions are no Ivy Leagues; they may have no name recognition beyond a 10-mile radius of their locations; and they may have little or nothing to invest in their development efforts. However, they constitute a sector where donations may yield the highest returns on investment.

Donors should rethink their contributions to hugely endowed institutions, no matter how tempting their baits may be. With the exception of those who stumble into their wealth or inherit it, most rich people get that way by spending less than they earn and investing the difference in ventures with high-yielding returns. The same thinking and logic ought to steer their generous hearts and guide their decisions to donate to universities. They should think of where their dollars will make the most difference, where they will affect the most lives, where they have potential to transform the institution, where the campaign is for genuine academic excellence not merely the growth of the endowment or the ego of the president.

If I had a million dollars to donate, I would think of investing it in higher education for sure, but universities with endowments of more than $1-billion would have a tougher time persuading me to part with my money, while a struggling institution that is doing a superb job educating its students and that can demonstrate how the money will make a difference will readily command my attention.